As all retailers gird their loins to do serious battle for customers and sales in today's evolving and competitive marketplace, competitor price monitoring has become indispensable as the keystone for strategic decisions regarding pricing, sales, profits, and survival. Competitor price monitoring makes the difference between making a sale and getting a new customer -- or not getting a chance to sell your products in today's ultra-competitive eCommerce marketplace.
Because of today’s transparency, everyone can see how each one prices in relation to the others. If you have a similar price or are priced incorrectly, you’re going to lose the sale.
Here are five major reasons competitor price monitoring is one of the most important activities you'll ever do to stay in business:
1. Most consumers start with a Google search or Comparison Shopping Engine search. This, in turn, leads them to the products and prices they will consider -- and on which they will ultimately make their buying decisions. If you're not in on the search, they're not going to find you if price is the main consideration.
2. Unless you know where you're priced in relation to your competitors, you might be (probably are) losing sales. It's imperative for you to know if you’re priced higher or lower. You need to know if you can charge a large enough difference in price to win the sale. A one percent difference in pricing might not make a difference at all, but pricing ten per cent lower could be the difference in your selling success. So competitor price monitoring matters very much.
3. You've got to study the prices to understand the market. Retailers must look at several competitors across the board to get an idea of what the real market looks like -- and to judge and price wisely and competitively. All retailers have become experienced, savvy, and more competitive than ever before. They know how to quantify value in dollars and cents; they're looking at their competitors' prices just as you are, to find the right price points to make the sale. You could be losing sales to your competitors without even knowing it. You can only know this if you see what products they have and how they're pricing them.
4. You need to know how to distinguish yourself (or not) through price. When you start up an eCommerce site, even the best business strategy must be price-based. You have to know what your competitors are charging and how they’re charging. If you're going up against an entrenched market leader or if there is no clear leader but everyone in the market has the same pricing model and similar prices, you will need to know what everyone else is doing so you can defend your different model and find ways to be distinctive.
5. Low price and value aren't mutually exclusive. Low price doesn’t mean it's not a value. Today, the buyer's decision comprises pricing, brand, credibility, ease of using your site, and what additional features, promotions or specials you may have to keep the customer interested, like free shipping, and now, same-day shipping. But price is still the attraction du jour -- although I think it's bouncing back as retailers feel their way and the fickle customer settles down -- and online buying behaviors evolve further to reflect value and service. However, if you don't meet some of the low prices of retail giants (who can afford to price low because of economies of scale and deeper pockets), you may not get the eye of the customer, so no sales and not a bright future. One strategy may be to compete on price on a few items that you can afford until the customer gets to know you better. But you obviously have to know the prices. Use loss leaders; focus on particular products, niche selling, etc.
Bottom Line For Your Bottom Line:
It's becoming increasingly difficult, if not impossible, today, to sell online without taking price into account and being aware of your competitors' prices. How does a retailer determine the "correct" pricing for doing business? Focus on competitor price monitoring to insure that you will stay a step ahead of your competitors. The good news is that competitor price monitoring is affordable, accessible, and expandable to all retailers and takes just seconds to get the information you need in an easily-usable form. It's hard to believe that a lot of retailers are still not even aware of the amount of sales they're losing. Don't let it be you.